Florida Mortgage Trends

FTC warns of Rent-Buyback Fraud. Also be careful on Short-sale mistakes

June 18th, 2010 11:27 AM by Scott Bray


Here's very interesting information to avoid being a victim:

The FTC has warned us that "Rent-buyback" schemes are on the upswing. Underwriters and law enforcement officials are on the watch for anything that looks like the con artist offers to take title to the property and simultaneously provide an official-looking rental agreement or lease-option contract that purports to give the owner the right to repurchase the house after they regain their financial footing. Firms like The Prieston Group, however, through its repurchase insurance program, are covering clients from losses. GO HERE

In an article from "Managing REO", California Real Estate commissioner Jeff Davi issued a consumer alert warning consumers and real estate agents about the "perils and potential pitfalls" of short sales. The alert educates consumers and real estate agents to recognize the elements of a fraudulent or questionable deal. Most define a short sale as one that involves the sale of a property wherein a seller receives an offer from a buyer that is less than the amount of the mortgage loan on the property, and the lender is asked to accept less than what is owed in order to allow the transaction to close. The DRE warns in some instances a seller may be required to pay taxes on the forgiven debt, and warned of unscrupulous agents and straw buyers. Short sale negotiators must be licensed real estate brokers (or a licensed real estate salesperson where that person is working under the supervision of his or her broker). Any and all payments must be fully disclosed and made part of the escrow documents. If there are any fees to be paid "outside" of escrow, this may be the red flag that the payment is illegal. For the entire story: http://www.managingreo.com/

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Posted by Scott Bray on June 18th, 2010 11:27 AM


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